By Donald C. Royse
A broad definition of economic recession, generally agreed upon, and found in such places as the Business Insider, 247wallst.com, is disruption in the banking and financial system, steep fall-offs in spending, rising bankruptcies and an increase in companies weathering financial distress.
Most economists agree that recessions involve “asset bubbles,” which is an unrealistic evaluation of investment tools, whether it is land, gold, real estate or equities.
The website, 247WallSt.com, refers to these factors in an analysis of the 13 worst recessions since the United States was founded.
In 1797, it was land speculation and the British closure of American ports. The American economy changed from an export economy then to a domestic economy.
In 1807, it was trade restrictions put in place by Thomas Jefferson against England and France.
In 1815, it was heavy debt and land speculation following the War of 1812 with Britain.
In 1837, it was land speculation compounded by President Jackson’s decentralization of the banks and the unintended consequence of removing regulation.
In 1857, it was the unrealistic enthusiasm of the gold rush.
In 1873, it was an unregulated boom in the railroad industry, followed by the crash of the New York Stock Exchange and 14 percent unemployment.
In 1893, the unregulated railroad industry was over-extended and over-valued, leading to 10 percent unemployment and the worst depression until the Great Depression. This occurred under President Harrison, a Republican businessman who enacted tariffs.
In 1907, it was unregulated railroads, steel, banking, and economic disasters during some 30 years of Republican presidents.
In 1920, it was the disruption of World War 1, occasioned by debt and unemployment.
The Great Depression lasted from about 1922 to 1934. Calvin Coolidge and Herbert Hoover were the presidents for much of that period. They were Republican businessmen who resisted government action because they wanted to avoid inflation which might disadvantage businesses.
In 1973, it was high unemployment and high inflation during the presidencies of Richard Nixon and Gerald Ford, occasioned by the price of oil and the price of war. Unemployment peaked at 9 percent.
In the 1980s it was inflation and unemployment under the presidency of Ronald Reagan, an actor recruited by GOP politicians as a good PR man in front of the camera.
In the 1990s President Clinton reduced the deficit and stimulated economy through programs such as NAFTA. George W. Bush increased the debt with the Iraq War and reduced regulation, resulting in overextended credit and risky mortgages, and the failure of many financial institutions. Unemployment was about 10 percent for two years.
President Trump exploded the debt, attacked foreign trade with tariffs and reduced regulation. Every recession or depression has involved these actions.
Donald C. Royse is a member of The Dominion Post’s Community Advisory Board.
